By Michal Aleksandrowicz and Gianluca Lo Nostro
(Reuters) - Europe's biggest meal delivery firm Just Eat Takeaway said on Wednesday it had agreed to sell its U.S. unit Grubhub to Wonder at a steep loss to the billions it paid a few years ago, ending a years-long search for a buyer and boosting its shares.
The Amsterdam-listed company said it would sell Grubhub, which it has been looking to offload since 2022, to Wonder for $650 million, sending its shares soaring more than 15%.
It had bought the business for $7.3 billion in 2020 when the pandemic drove up delivery firms' valuations. The subsequent sale process was hampered by slowing growth, high taxes and a question of fee caps in New York City.
"Just Eat Takeaway is at last putting an end to its disastrous U.S. journey," Bryan Garnier analyst Clement Genelot said.
Just Eat CEO Jitse Groen had in February said the M&A environment was not easy in the U.S., where caps on how much delivery firms can charge restaurants cost the group some $100 million per year.
Grubhub's enterprise value of $650 million includes $500 million of senior notes and $150 million cash, Wonder said in a statement.
Wonder is a food-delivery startup led by former Walmart (NYSE:WMT) executive Marc Lore.
Just Eat said it expected to get net proceeds of up to $50 million from the deal, which would support investments in countries where it has the greatest competitive advantage.
Its strongest markets include Britain, Ireland and Northern Europe.
J.P.Morgan said in a note it had argued for an about $1.2 billion valuation for Grubhub in the past, but the market would view the deal as positive even at a lower valuation.
Some analysts were expecting Just Eat to use the proceeds to launch another share buyback programme. The company declined to say if that was the case when contacted by Reuters.
The transaction is expected to be completed in the first quarter of 2025. Just Eat said it would not impact its full-year guidance and that it retains no material liabilities associated with Grubhub.
However, analysts said it might need to exit other markets, such as Canada or Australia, to close the valuation gap with European peers.
Excluding the U.S., Just Eat operates in 18 countries. It exited New Zealand and France earlier this year.
If Wednesday's gains hold, Just Eat's shares will see their biggest daily rise since August 2022, wiping out most of this year's losses, which stood at 18.1% at the end of the previous session.